Claiming Bankruptcy

Although filing for a bankruptcy is one of the toughest situations an individual can be confronted with, doing so is amongst the very few ways that can help you to come out of the phase of financial disaster. Dealing with aggressive creditors who just wish to get their money back is often embarrassing and frustrating for many people. Nevertheless, if you are really in a situation such that financial recovery is a distant possibility, claiming bankruptcy must be considered.

Claiming bankruptcy can be advantageous to you in a way such that, there are certain bankruptcy exemption clauses that prevent the creditors from taking away some of your property. These laws may however, vary for every state and the properties that are exempted may include some clothing, some part of your home, household furnishings, life insurance money and some fraction of your earned money.

Claiming bankruptcy must be your last option, as the bankruptcy will stay on the credit and it would not be possible for you to exercise your rights to full-fledged banking services or similar other financial services unless you pay off the debts. This means that you may be allowed to open an account in a bank but you have to inform the bank that you are bankrupt and so they will impose certain restrictions on your account. This was just a minor problem you may face after having filed a bankruptcy and there can be various other problems. So before you jump for claiming bankruptcy, ensure you have discussed all pros and cons of filing for a bankruptcy claim with a bank lawyer.

Claiming Bankruptcy

Even for bankruptcy filings, you need to fill a US$1700 form and hire a lawyer for guiding you in the entire bankruptcy process that in itself, is costly. So think twice before claiming bankruptcy. In case, you are ready for bankruptcy claim, here are some important methods you can follow to claim bankruptcy.

Hire a Lawyer
Hiring a bankruptcy lawyer is essential as he will analyze the whole situation and offer you the best choice for bankruptcy. There are various types of bankruptcy and a lawyer will help you to choose the most convenient way.

Choose Right Type of Bankruptcy Claim Forms
Generally, the three common types of bankruptcy people file are:

• Chapter 7 Bankruptcy
• Chapter 13 Bankruptcy

Your lawyer will help you to choose the most suitable form that you must fill. In Chapter 7 bankruptcy forms, the court decides as to what amount will be deducted from the debt and how much time will the debtor take to repay the amount. In Chapter 11, that is generally filed by big firms and corporations (however, even individuals can file it), firms have to prove to the court that they had good past record and they can pay back the debt, if given some time. The time is decided by the court. In this type of claims, residences and buildings can be saved from foreclosure. Chapter 13 takes a percentage of the debt from paychecks of the individual.

Hope for the Best, Be Prepared for the Worst
Gather money and finances that you will be required to pay to your lawyers, attorney and during court proceedings. Often, these expenses can be quite heavy on the pocket and hence, think properly before you file. Often the bankruptcy court may decide that you can pay back your debts and there is no need to file bankruptcy. So you must be prepared with a list of all your liabilities, assets and other financial details so that you can produce it in the court. You must fill the proof of claim bankruptcy form that is a list of all your creditors, which will be sent to the creditors by the court.

Claiming bankruptcy is definitely a complex legal procedure that requires the guidance of good lawyers. After you have filed for the bankruptcy, wait for two to six weeks as this is the time courts take to respond to your request. In the event of bankruptcy process, you have to be patient and work for the betterment of your situation.